Growth | January 2011 | By Daniel P. Smith
The Growth 40
Among the top 40 markets, only Seattle and Austin, Texas, scored more than 130 points on Pitney Bowes’ Growth Index, catapulting the metropolitan areas to No. 2 and No. 7, respectively, among the Growth 40’s large markets.
Seattle benefits from an economy rooted in hard-charging 21st century companies, such as Microsoft, Starbucks, and Amazon. Internet and technology companies flock to the region, giving the city a robust, modern vibe, while an entrepreneurial spirit thrives to make the city an attractive place for business expansion of all types.
The Emerald City also holds a healthy median household income ($63,432 in 2009), a large collection of white-collar workers, and a population base expected to add as many as 250,000 residents by 2014. Such allure is expected to pull quick-service chains like Firehouse Subs into the region in swelling numbers throughout the coming years.
The size of each market was determined by the following population breakdowns: large markets have 1,000,000-plus citizens; medium markets have 250,000–1,000,000; and small markets have 100,000–250,000. Pitney Bowes Business Insights’ analysis reflects competitive metrics based on chains with at least 25 units.
“Particularly on the fast-casual side of the equation, we need to make sure we have enough folks that fit our target demographic,” says Firehouse Subs CEO Don Fox, who says Seattle and many of its Pacific Northwest neighbors hit the mark. While Fox hopes to expand Firehouse into Seattle within the next 2–3 years, current growth is centered in other promising large markets, including Philadelphia and Boston.
Like Seattle, Austin also carries compelling potential for quick-service restaurant growth.
Riding high among the nation’s most en vogue cities because of its diverse array of cultural and entrepreneurial opportunities, Austin is home to the 50,000-student University of Texas and boasts the list’s highest Growth Index score. The metro area is also expected to welcome nearly 250,000 residents and 100,000 households over the next five years, with many new residents, specifically young professionals, joining the area’s already vibrant white-collar workforce to spur quick-service potential.
Seattle and Austin also share another top 10 large-market trend. Each of the top 10 areas hosts a college as well as an anchor employer, factors that bode well for the quick-service sector and provide engaged customers, better insulation from economic fallout, and a viable employee pool.
Portland, Oregon, hosts Nike and adidas alongside a half-dozen colleges; Philadelphia and Boston both play to large college crowds and marquee national companies; Tucson has the University of Arizona, the U.S. Army Intelligence Center, and various Major League Baseball spring training locales that invite tourists; Pittsburgh hosts eight Fortune 500 companies and more than 20 colleges; Houston serves as the nation’s energy hub, while also holding more than 60 institutions of higher learning; and Rochester, New York, is home to Eastman Kodak and Bausch and Lomb, as well as the well-regarded University of Rochester.
Dunkin Donuts’ vice president of franchising and market planning Grant Benson says the presence of established corporations and a lively, youthful population is “indicative that there’s vibrancy in that market with continued development and emerging services. It goes beyond the potential customer base and speaks to a real investment in the community and a pro-business mindset.”
|TOP 15 Medium Markets||QSR Units||Population
|3||El Paso, TX||265||2,856||127.12||806,606||265,225||$34,271|
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